What is a Copyleft License and Why is it Risky for Startups?

A Copyleft license is a type of open-source software license that allows anyone to freely use, modify, and distribute the software, but with a critical condition: any derivative works must also be distributed under the same license. The most well-known example is the GNU General Public License (GPL).

What It Means in Practice

If your startup incorporates software under a strong copyleft license into your product (even indirectly), you may be legally required to make your own source code public if you distribute your product — including commercial offerings.

Why It’s Risky for Startups

Risk	Description
Loss of Proprietary IP	If your product includes copyleft-licensed components and is distributed (even as a binary), you may be required to open-source your own code under the same license. This could expose your competitive advantage.
Compliance Burden	Copyleft licenses have strict requirements for attribution, license inclusion, and source code availability. Failing to comply can result in legal liability or loss of rights to use the software.
Investor Concerns	Investors typically expect that your IP is protected. Copyleft usage can raise red flags during due diligence, especially if your software is not cleanly separated from copyleft components.
Compatibility Issues	Copyleft licenses can be incompatible with permissive licenses or proprietary codebases, limiting your integration options and flexibility.
Distribution Triggers Legal Obligations	Even just offering a downloadable product or a physical device containing copyleft code may trigger legal requirements to disclose your source code.

Safer Alternatives to Copyleft Licenses

If your startup wants to use open-source code without the same legal exposure, consider permissive licenses like:

MIT
Apache 2.0
BSD

These allow usage and modification without requiring you to open-source your own work.

Bottom Line

Copyleft licenses promote software freedom, but for startups building proprietary software or seeking funding, they can pose significant legal and business risks. Always conduct open-source license audits and consult legal counsel before incorporating copyleft-licensed components into your stack.